Hirst pays £250,000 to revamp the Wallace for his show

Blue period: Damien Hirst at the Wallace Collection with two of his works set off by the silk on which he spent £250,000

Damien Hirst personally funded a £250,000 refurbishment of galleries at the Wallace Collection to display his new work alongside the Old Masters.

Hirst, 44, is showing 25 works never seen in Britain - he follows Lucian Freud in being one of the few living artists allowed an exhibition at the gallery.

The show marks Hirst's return to the solitary practice of painting, with assistants helping only in preparing the canvases and backgrounds. The works take their inspiration from early Francis Bacon and display familiar subjects including sharks and skulls.

However, the sumptuous blue silk he bought to offset them will be removed from the walls after the show as the colour is considered unsuitable for paintings that will return there.

Staff at the gallery, set in what was once a private townhouse off Oxford Street, are thrilled to be showing the works. Dr Christopher Vogtherr, acting head of collections, said: "We have a very important collection of 18th and 19th century British painting and we want to show how British painting is continuing.

"It's a privilege for a contemporary artist to be shown in the context of Velázquez and Rembrandt. But it's mutually beneficial. For us it's a privilege to show one of the most important living artists." Hirst said the idea came when he took his sons to see the Wallace's collection of armoury after Hamleys did not have the toy weapons they were keen on.

He spent a week hanging the paintings in two galleries scheduled for a revamp.

Hirst said it was "great" to see how his work stands up next to the Old Masters, but added: "I'm glad they haven't got a whole room of Rembrandts. When there's one, you can just about get away with it." Hirst is now enjoying painting, which he described as more personal. "As you get older, you've less time in front of you than you have behind you. You're just trying to make sense of it all," he said.

Hirst has created his own Wallace Collection Trail taking in favourite works by Nicolas Poussin, Rubens, Rembrandt and Titian.

"It's an amazing collection. Though it's a shame there's no Goya," he said.No Love Lost: Blue Paintings by Damien Hirst is at the Wallace Collection from tomorrow until 24 January.

A Hirst work fetched £100,000 at Christie's last night in a sale which raised £767,180 for the charity For Africa's Children Every Time founded by Laurence Graff.